The USDCAD pair had a deep fall on Thursday owing to disappointing US Manufacturing PMI data in North American market hours. The pair fell below 1.3100 handle and went on steep bearish decline across both Asian and European market hours falling to one week lows. While there was a minor uptick around 1.3100 neighborhoods, Loonie bulls made best of opportunity to drag the pair well inside 1.30 handle from seven week highs. As of writing this article, the USDCAD pair is trading at 1.3051 down by 0.28% on the day after hitting an intra-day low of 1.3049. As the pair trades near fresh weekly lows, today’s economic docket, highlighting the release of keenly watched US non-farm payrolls data and monthly Canadian jobs report will now play an important role in determining the pair’s next leg of a directional move. A sharp US Dollar retracement slide from 16 month highs, weak US macro data and increased risk appetite in market which investors move funds from safe haven assets served as key factors which prompted some aggressive long unwinding trade on Thursday.
Today’s US/Canadian jobs report might provide a fresh directional impetus
The pair tumbled around 100-pips, taking along some short-term trading stops near the 1.3100 handle and seemed rather unaffected by a sudden fall in crude oil prices, which tend to undermine demand for the commodity-linked Loonie. With oil prices consolidating overnight slump and a subdued USD price action doing little to lend any support or assist the pair to regain positive traction, traders seemed reluctant to place any fresh bullish bets ahead of the upcoming event risks. While the current price action paints a picture where Canadian Loonie seems to have gained the upper hard, the immediate price action is a result of news driven momentum and fundamental support leans in favor of US regaining upper hand in long term.
However the price action could turn out in favor of Canadian Loonie as news has been circulating in market with indications of possible trade deal between US & China which would take a great bearish factor which has influenced price action of US dollar denominated instruments in recent past giving Loonie a great bullish boost. In short to medium term, the pair still remains locked in a wider price band putting it in a range bound path locked between 1.31745 & 1.2969 respectively. Regardless of momentum from proceedings of geo-political events, the pair needs to break out of mentioned price band to see any serious directional move. When looking from technical aspect, immediate support is pegged near mid-1.3000s, below which the pair is likely to accelerate the slide further towards challenging the key 1.30 psychological mark. On the upside, the 1.3100-1.3110 region now seems to act as an immediate hurdle, which if cleared could lift the pair back towards the 1.3165-70 supply zone.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Aussie, Kiwi Surge as Investors Pin Hopes on US-China Trade Deal
- Oil Price Fundamental Daily Forecast – Oversupply Concerns Weighing on Prices, US-China Deal is Wildcard
- E-mini Dow Jones Industrial Average (YM) Futures Analysis – November 2, 2018 Forecast
- Forex Daily Outlook – November 2, 2018
- Bitcoin and Ethereum Price Forecast – BTC Prices Still in Range
- Natural Gas Price Fundamental Daily Forecast – Near-Term Weather Forecast Supports Lower Prices